On a recent project I created a Transform Tool similar to the one you might find in a typical CS3 application like Photoshop, Illustrator or Flash. Once you instantiate this tool and and assign it a target, you can easily scale, drag and rotate it around the Stage at runtime. Optional properties include a min and max scale value, a boundaries Rectangle object to constrain where the target can be dragged and custom scale and rotate handle icons that you can specify via a linked MovieClip in the library.
In a future version I will combine scale and rotate into one mode eliminating the need to select between them.
Update 11/24/09 : This class has been refactored for improved legibility. Also added now is the ability to register specific targets on the stage via an internal _targets array. See documentation for details.
Update 11/24/08 : There was a syntax bug that was confusing placement of the transform handles which subsequently was throwing the selected object off screen at times. This has been fixed.